After a $54 Billion Airline Bailout, Elizabeth Warren Thinks She Gets To Make the Rules
More airline workers and more flights—not bailouts and restrictions on mergers—is the better policy.
Sens. Elizabeth Warren (D–Mass.) and Alex Padilla (D–Calif.) recently asked the Department of Transportation to fine airlines for delays and cancellations and prevent airline consolidation. The widespread delays and cancellations are indeed annoying, but the senators' demands won't help any more than Congress' last airline blunder did.
Remember the last airline bailouts? During the pandemic, politicians were fooled into handing out billions so that, among other things, airlines could keep their workers and be travel-ready when more passengers started flying again. Airlines got the money, passengers eventually returned, and somehow the airlines still weren't staffed and prepared.
The bailouts didn't cause the mess we are in, but they didn't prevent it. Recall just how much the airlines received. Throughout the pandemic, the 10 major passenger airlines pocketed direct payments of more than $54 billion (in rounds of $25 billion, $15 billion, and $14 billion), plus another $25 billion in subsidized loans from the Treasury Department and a suspension of the 7.5 percent excise tax on domestic air travel. Also receiving handouts were airports and airport contractors.
In exchange, the airlines were required to use the funds for payroll. They couldn't furlough workers for a time or reduce pay or benefits. Nor could airlines buy back shares of their stock or pay shareholder dividends. They also had to limit executive compensation. Finally, they would eventually have to repay a small fraction of the money.
The first bailout—$25 billion in 2020's CARES Act—did manage to prevent airlines from furloughing everyone and shutting down. It required airlines to continue flying to all destinations. While reduced frequencies were permitted, about 90,000 people per day (down from 2 million) managed to travel by air during the pandemic's height.
Was this outcome worth billions? No. Airlines had just enjoyed 10 solid years of remarkable profits. They were not at risk of disappearing and, owning lots of valuable assets, had tremendous access to capital markets for needed liquidity. Even in the worst-case scenario, airlines could go through the bankruptcy process, continue to fly safely while doing so, and emerge healthier. Either way, the airlines' pleas for handouts were idiotic. There was, contrary to their insistence, no systemic risk associated with closing or going bankrupt.
If the first bailout was unjustified, the second and third bailouts were total wastes. They were at least 10 times larger than what was needed to cover the payroll of those workers at risk of being furloughed. And so most of the money was used to pay workers whose jobs were never at risk. Shareholders pocketed the difference and the airlines then furloughed loads of workers anyway. Also, while airlines continued to pay pilots, pilot training wasn't kept up to date, thus preventing some from returning to the skies when passenger demand returned.
Uncle Sam's unwarranted generosity (with other people's money) and its implicit message weren't lost on airline bosses. Delta CEO Ed Bastian, for instance, told investors during a speech that it was worth investing in airlines since "even in the worst crisis imaginable we've proven ourselves. We've proven the value of what we bring to society. We've proven that governments will be there for us if ever needed again, hopefully never again."
While Warren pushed for some corporate accountability and Padilla joined the Senate late in the bailout process, the senators were ultimately willing participants in the scam. They also supported legislation that sent individuals checks regardless of need, thus creating large disincentives to return to work. This likely contributed to the airlines' labor shortages. Now these politicos are outraged and want to fine airlines for delays and prevent them from merging, a move often required to survive. Warren and Padilla's demands will hurt passengers rather than help them.
Instead, the senators should pledge never to bail out airlines again. That might not prevent airlines from coming out of an emergency without cancellations and flight delays, but at least taxpayers won't in the process be fleeced. Also, knowing that they will have to fly solo next time, airlines' shareholders may do a better job of planning for emergencies.
While they're all at it, they could work together to lift the requirement that U.S. commercial pilots have 1,500 flight hours before being hired. European pilots, who are just as safe as American pilots, don't face such a strict requirement. Also helpful would be raising pilots' retirement age higher than 65.
More airline workers and more flights—not bailouts and restrictions on mergers—is the better policy.
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Elizabeth Warren thinks she gets to make the rules, bailout or not.
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Elizabeth Warren Thinks She Gets To Make the Rules
She does. Nobody’s going to stop her.
I would be happy to take her deep sea fishing.
The ruling elite are gods, addicted to control, but out of control. And their victims are their supporting majority, and the dissenters who just want to be free to run their own life and let you run yours. Is that too much to ask? Evidently, it would create chaos, or so they claim. So, what about the chaos we have now? If the majority refuse to see it (willful blindness?) it will get worse until it destroy all, including the innocent dissenters.
“While they’re all at it, they could work together to lift the requirement that U.S. commercial pilots have 1,500 flight hours before being hired. European pilots, who are just as safe as American pilots, don’t face such a strict requirement. Also helpful would be raising pilots’ retirement age higher than 65.” This is the “Colgan Rule” — named after the Colgan Air flight that crashed in 2009, killing 50 people. The NTSB blamed both (dead) pilots for failing to recognize they were on the edge of a stall. And the FAA’s response was to henceforth require that a pilot had to have 1500 PIC hours before even *getting hired* at an air carrier. Both the Colgan pilots had way more than 1500 hours, there is no evidence that lower time pilots are unsafe (and some evidence they are *more* safe) but the FAA has never been wedded to evidence, common sense, or logic when they have some blood on the ground that needs to be washed away.
If the Airlines want the government money, they get the government control. Is this really surprising to anyone?
The mouse doesn’t understand why the cheese in the trap is free.
“Elizabeth Warren Thinks”
Assumes facts not in evidence.
Yah stopped reading after that…no she doesn’t
Speaking of which, when Jesus scooped congressional harridan Walorski to eternal reward for christianizing pregnant slave girls, was the car headed north or south? both? neither?
https://www.logicallyfallacious.com/logicalfallacies/Non-Sequitur
“Shareholders pocketed the difference and the airlines then furloughed loads of workers anyway.”
Muh private company.
Warrant is such a dumb cunt.
For someone who “supposedly” knows about economics, all of her actions demonstrate either a willful ignorance about economics or she’s just plain dumb as shit.
What’s even worse, the voters in MA must be some of the dumbest people in America today. The only people who would vote for this dumb bitch are people who are dumber than she is.
you just described every democrat / liberal
But Hahvahd!
Like, f’rinstance, goozarian?
I doubt you really believe what you say.
Um yeah, that’s how the strings of government money work.
Warren may be a retarded fake indian twat, but to say .fed cannot set the terms of their loans is even more retarded.
Hey. Give me money for doing nothing, and I’ll continue to do nothing as hard as I can.
“And so most of the money was used to pay workers whose jobs were never at risk. Shareholders pocketed the difference and the airlines then furloughed loads of workers anyway.”
I’m no economist, but I do know the definition of a woman, and in consecutive sentences in the article, aren’t “jobs were never at risk” and “furloughed loads of workers anyway” direct contradictions of each other?
“This likely contributed to the airlines’ labor shortages.” Citation needed.
But I’m not opposed to never bailing out a company again. If they’re too big to fail then they should be broken up by antitrust legislation. Would be amazing to see a government actually let the market work somewhat.
They also supported legislation that sent individuals checks regardless of need, thus creating large disincentives to return to work.
What part of this do you not get?
“Instead, the senators should pledge never to bail out airlines again.”
Such a pledge would be worthless. It’s not like they can bind future Senates to not bailing out the airlines in the future.
Why not? We keep re-electing the same assholes over and over.
Because they aren’t immortal. And that’s aside from the fact that any such pledge would more than likely be a lie.
“We”? Not the Nixon Anti-Libertarian Law?
The election results don’t lie, and it has nothing to do with Nixon.
Warren and Padilla should be severely fined for every piece of legislation they support that doesn’t actually achieve or do what they promise or promise it will. They’d be destitute in less than a year! The personal wealth of all Senators and Representatives should be subject to forfeit to offset the fiscal impact of their failure and dishonesty on Americans.
I think every single politician should be subjected to stockades when they fail to make on their promises, and the public should be allowed to hurl rotten fruit and insults at them. That’s everyone from the lowliest sheriff to the President of the United States.
I’m really not kidding.
I have a few friends that are pilots – one for American Airlines, one for Delta, and one for UPS. They were all on the swim team with me – and we’re the same age, which means they’ll hit 65 in 2 or 3 years. I’ll ask them if they would fly (in their current jobs) a year or two past 65 if the regulations allowed it. My guess is that they would say yes.
Warren: The economic acumen of Paul Krugman
The political leanings of Bernie Sanders
The ethics of Ilan Omer
The skill of AOC
The constitutional knowledge of Karine Jean-Pierre
And the overall competence of Joe Biden.
So an overall superior human being compared to even the smartest theoretical Republican.
Wow, what a zinger.
No Tony, democrats are subnormal filth. Like you. Even a snit Republican is far superior. You’re a cockroach among gods.
You keep saying this but you never explain why. The only true cunts I ever run across are all Republicans. And they’ve been getting worse over time.
Read Flight-ER-Doc’s posts. They’re the ones who brought us into the economic mess we’re in right now. Not the Republicans you decry against.
I like it…very accurate!
As Warren Buffet will tell you, don’t buy airline stocks, because they never make money.
At some point maybe we’ll realize that air travel is just like any other form of transportation: both necessary and unprofitable in the business sense.
Despite making the airlines the target of his first free-market salvo, Reagan’s project has been failing for 40 years. At least if you consider the project “making a better society” instead of “making a shit ton of money for a handful of lizard people.”
Where were you forty years ago?
Flying was pretty much a luxury for the elite or strictly business. Common folk, other than a once in a lifetime trip to Hawaii or something, just didn’t fly.
The “Regan Project” as you call it, changed all that. Flying opened up to everyone pretty much. And going to the airport to fly to Denver to see Aunt Tillie became a reality for a broad range of people.
Hm, my grandparents flew private on yearly vacations and nobody would call them rich. On one income too.
Most people have been squeezed of their actual wealth by these selfsame policies. It’s not even controversial or that complicated. Destroy the union sector and people give up wealth to the bosses. You don’t know what kind of world we could have if we’d have stuck with what worked till then.
To clarify, I should say that it’s apparently impossible to make a profit running an airline that anyone is happy to use. And it’s obvious that it’s unprofitable absent government subsidy.
Nope. Maybe if you fucks didn’t shut everything down they might do better.
Comrade Tony’s introduction to revoruuutionary social Supine and Demand theory. Thanks to this, no decent man can but be ashamed of the government he “lives” under.
No, Tony, most people haven’t been “squeezed of their actual wealth” by Reagan.
Middle class stagnation started in the early 1970’s, in large part due to the expansion of the social welfare state, increasing regulation, and inflation, all policies you favor. It is people like you who are voting to impoverish the middle class.
Maybe you should come fishing with me and Liz, and I can do my best to make a better society.
This goes for you and about 50 other regulars here: Do you understand that murdering someone in cold blood is not the same as winning an argument?
It’s a great way to thin the population of evil people. Like progressive democrats.
What makes someone more evil than a person who commits genocide over political differences?
“Progressive democrats” are not a “national, racial, religious, or ethnic group”; they are a political movement, literally like the Nazis.
Nevertheless, I disagree with Ted: one can’t effectively fight Nazis like you by becoming a Nazi oneself.
Airline deregulation was 1978. Signed by Jimmy Carter.
Hey there Gozer! Are you willing to claim a better understanding of economics than hers and also greater intelligence? If so, perhaps you should be running for office or holding down a teaching position in one of your state’s post-secondary schools. If not, how about toning down your misogyny a tad? It does you no credit at all and affects her even less. Makes me wonder as always, who hurt you when you were growing up? Or trying to get dates? Maybe I’ll just go with STFU after all.
Losing count of all the leftist socks…
I just muted the loser. Only took a second.
Fauxahontas is right. If you take the bailout, you’re the state’s beatch…
The pilot shortage is do to so many pilots refusing to get the experimental Covid shots. New pilots create a higher risk and many are not from the US and properly vetted as pilots. As long as the airlines stick to that requirement, there will be shortages. Asking pilots to fly longer hours will violate laws and those hours are just for flight hours, not including pre-filight, post flight, time between flights and actually coming and going from rest stops / down time. Pilot hours are rough as is, pushing that by circumventing laws will make flying all the more dangerous. The FAA is also known to not want to budge an millimeter when it comes to changing regs, Warren is insane to think she can do so easily.
Just drive whenever you can. Who needs the aggravation and stress of flying.
It wasn’t always that way.
What really killed the airlines is that the Congress way increased the amount of flying hours needed before anyone could even start commercial pilot training. They jacked it up by over 1,000 hours. Getting 1,000 flight hours is not cheap. Not cheap at all. So they are getting far fewer pilots even starting training. Pilot shortage. I wonder why.
Buttering the bread of the military pilots after they fight wars I don’t want them to fight.
Good ole Lizzy Warren, Our country’s first native American senator. She’s always looking for scalps. Doh!
When are we going to get over the “too big to fail” garbage?
Here’s a question, what do people think would have happened if we didn’t bail them out? Not the ideal bubble of what should happen, but really? Could it have really been any worse?
I can’t believe that all the airlines would go bust. Of course, I also don’t believe that the lockdowns were either justified nor legal. Everyone chilling tfo and wearing a proper N95 mask would have been fine.
The problem has been identified and Elizabeth Warren is a large portion of the problem.
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There must be something this moron does that won’t leave me shaking my head at her arrogant stupidity. I would not hold my breath because I’ve been hoping that for many years. How is it possible for anyone to be 100% in screwball land 100% of the time?